Patients Would Lose In Blue Cross-Tufts Medical Center Dispute 03:39

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Blue Cross Blue Shield members who see doctors at Tufts Medical Center may have to find a new physician starting in January. The state’s largest insurer and the hospital have reached an impasse in contract talks. Blue Cross sent letters Tuesday warning patients of the possible change.

'Work It Out'

To get a patient's perspective, I walked into one of the glass-walled studios at WBUR where Dave Faneuf, a WBUR anchor, had just finished a newscast. Faneuf is a Blue Cross member who had surgery this summer to remove a brain tumor. Now he’s receiving radiation.

"If this reoccurs, if it comes back, radiation will not be an option again," Faneuf said, "so the only option is more surgery. And the team that performed the surgery is at Tufts. They’re the ones who've been in there, they're the ones who've written the notes. If I have to go back, they're the ones I want doing [the surgery]."

But if Tufts and Blue Cross cannot come an agreement on the contract that expires on Jan. 17, 2012, then Faneuf and about 88,000 other Blue Cross members would have a month to find new doctor. Pregnant women and patients with chronic illnesses would have three months.

"That’s absolutely unacceptable," Faneuf said. "Get to it, guys, and work it out."

Rates At The Center

The dispute is, of course, about money. Tufts Medical Center says its latest request is for a 3 percent increase each year for the next three to five years. Blue Cross says Tufts doctors are willing to take less, but that Tufts wants much higher rates for hospital services. Blue Cross Senior Vice President Jay McQuaide says Tufts is already making a 15 percent profit on hospital charges.

"They’re earning a profit when they care for our members, they're paid comparably to other teaching hospitals in eastern Massachusetts," McQuaide said. "And they're seeking rate increases that are inconsistent with what other hospitals have already accepted."

Tufts Medical Center CEO Eric Beyer has some problems with that analysis. He says Tufts is different from the "comparable" hospitals to which McQuaide refers because it has a larger share of Medicaid patients. Hospitals say they lose money on Medicaid patients and many make up for the loss by boosting charges to private insurers.

And Beyer says Tufts has historically received significantly less for care that is just as good as Boston's highest paid hospitals. Several recent state reports support Beyer's claim. The point of those reports was to highlight the difference in payments, but they may be encouraging Tufts to demand higher rates.

"That kind of transparency, rather than making high-priced providers come down in price, will understandably make those who are getting lower rates question why their rates are lower," said Harvard School of Public Health economist Meredith Rosenthal.

So on the one hand you have Tufts saying it's time to close the gap between what it and the Partners hospitals are paid. And on the other hand you have Gov. Deval Patrick and employers demanding lower health care increases. The insurers are in the middle, says Massachusetts Institute of Technology economist Jon Gruber.

"The only leverage they have is on price so they have to squeeze what they can from the hospitals," Gruber said.

Beyer, the Tufts CEO, says his request for a 3 percent annual increase is justified.

"We absolutely believe that our ask is in line with what the governor and others have called for," Beyer said. "We are a very efficient provider. Our physicians have earned what they've been paid by being efficient. We absolutely believe that we are doing the right thing for the people of this commonwealth."

Major employer groups disagree, saying that while Tufts Medical Center provides great care, businesses will likely side with Blue Cross' efforts to limit hospital rate increases.

"There are no good guys or bad guys," said Eileen McAnneny, with Associated Industries of Massachusetts. "It’s just we have to learn to do things differently and to provide care with a finite amount of financial resources."

Tufts and Blue Cross reached a similar impasse almost three years ago and eventually settled a new contract. If they don't resolve this dispute, tens of thousands Blue Cross members will have to find a new place for care or a new insurance plan early next year. The state Division of Insurance says it will "closely monitor continuity of care issues during any transitional period.”